A positive step nevertheless

Money supply growth (M1) in the UAE has been accelerating. According to the latest Central Bank figures, M1 grew by 51 per cent year on year in 2007, and M3 grew by 36.7 per cent. This is fueling inflation, and the presence of the dollar peg limits the tools the monetary authorities have to manage the economy. In response to this, the UAE Central Bank is seeking to revise its current personal loan regulations, Circular N.12, which was issued in 1993. According to the new proposals, borrowing will be capped at 25 times the monthly salary, with monthly repayments not exceeding 60 per cent of the monthly salary.